Intrinsic value of Fortress Transportation&Infrastructure I - FTAI

Previous Close

$18.54

  Intrinsic Value

$3.09

stock screener

  Rating & Target

str. sell

-83%

Previous close

$18.54

 
Intrinsic value

$3.09

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of FTAI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.76
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
  7.33
Revenue, $m
  149
  230
  344
  500
  705
  969
  1,301
  1,708
  2,197
  2,775
  3,446
  4,214
  5,079
  6,043
  7,105
  8,265
  9,521
  10,870
  12,311
  13,841
  15,459
  17,162
  18,949
  20,821
  22,775
  24,813
  26,935
  29,144
  31,440
  33,826
  36,306
Variable operating expenses, $m
 
  265
  391
  562
  789
  1,080
  1,445
  1,894
  2,434
  3,072
  3,811
  4,645
  5,599
  6,662
  7,833
  9,112
  10,496
  11,984
  13,572
  15,259
  17,043
  18,920
  20,891
  22,954
  25,109
  27,356
  29,696
  32,130
  34,662
  37,293
  40,027
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  190
  265
  391
  562
  789
  1,080
  1,445
  1,894
  2,434
  3,072
  3,811
  4,645
  5,599
  6,662
  7,833
  9,112
  10,496
  11,984
  13,572
  15,259
  17,043
  18,920
  20,891
  22,954
  25,109
  27,356
  29,696
  32,130
  34,662
  37,293
  40,027
Operating income, $m
  -41
  -35
  -47
  -63
  -84
  -111
  -145
  -187
  -237
  -296
  -365
  -432
  -520
  -619
  -728
  -847
  -976
  -1,114
  -1,262
  -1,418
  -1,584
  -1,759
  -1,942
  -2,134
  -2,334
  -2,543
  -2,760
  -2,987
  -3,222
  -3,466
  -3,721
EBITDA, $m
  24
  67
  100
  146
  205
  282
  379
  498
  641
  809
  1,005
  1,228
  1,481
  1,762
  2,071
  2,410
  2,776
  3,169
  3,589
  4,035
  4,507
  5,003
  5,524
  6,070
  6,640
  7,234
  7,853
  8,496
  9,166
  9,862
  10,585
Interest expense (income), $m
  13
  13
  26
  44
  69
  102
  145
  199
  264
  344
  437
  545
  669
  809
  965
  1,136
  1,324
  1,527
  1,745
  1,977
  2,225
  2,486
  2,761
  3,050
  3,352
  3,668
  3,997
  4,340
  4,697
  5,068
  5,453
Earnings before tax, $m
  -40
  -48
  -73
  -107
  -153
  -213
  -290
  -385
  -501
  -640
  -802
  -977
  -1,190
  -1,428
  -1,693
  -1,983
  -2,299
  -2,641
  -3,006
  -3,396
  -3,809
  -4,245
  -4,703
  -5,184
  -5,686
  -6,211
  -6,757
  -7,327
  -7,919
  -8,534
  -9,174
Tax expense, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -20
  -48
  -73
  -107
  -153
  -213
  -290
  -385
  -501
  -640
  -802
  -977
  -1,190
  -1,428
  -1,693
  -1,983
  -2,299
  -2,641
  -3,006
  -3,396
  -3,809
  -4,245
  -4,703
  -5,184
  -5,686
  -6,211
  -6,757
  -7,327
  -7,919
  -8,534
  -9,174

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,547
  2,279
  3,409
  4,946
  6,978
  9,593
  12,876
  16,907
  21,756
  27,479
  34,123
  41,719
  50,285
  59,829
  70,349
  81,832
  94,264
  107,623
  121,889
  137,040
  153,055
  169,919
  187,618
  206,144
  225,495
  245,674
  266,688
  288,551
  311,285
  334,913
  359,467
Adjusted assets (=assets-cash), $m
  1,479
  2,279
  3,409
  4,946
  6,978
  9,593
  12,876
  16,907
  21,756
  27,479
  34,123
  41,719
  50,285
  59,829
  70,349
  81,832
  94,264
  107,623
  121,889
  137,040
  153,055
  169,919
  187,618
  206,144
  225,495
  245,674
  266,688
  288,551
  311,285
  334,913
  359,467
Revenue / Adjusted assets
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
  0.101
Average production assets, $m
  1,069
  1,651
  2,469
  3,582
  5,054
  6,948
  9,326
  12,246
  15,757
  19,902
  24,714
  30,216
  36,420
  43,333
  50,951
  59,269
  68,273
  77,949
  88,281
  99,254
  110,853
  123,067
  135,886
  149,304
  163,320
  177,934
  193,154
  208,989
  225,454
  242,568
  260,352
Working capital, $m
  97
  45
  67
  97
  137
  189
  254
  333
  428
  541
  672
  822
  990
  1,178
  1,386
  1,612
  1,857
  2,120
  2,401
  2,699
  3,014
  3,347
  3,695
  4,060
  4,441
  4,839
  5,252
  5,683
  6,131
  6,596
  7,080
Total debt, $m
  260
  526
  902
  1,414
  2,091
  2,961
  4,055
  5,397
  7,012
  8,918
  11,130
  13,659
  16,512
  19,690
  23,193
  27,017
  31,157
  35,606
  40,356
  45,401
  50,734
  56,350
  62,244
  68,413
  74,857
  81,576
  88,574
  95,855
  103,425
  111,293
  119,470
Total liabilities, $m
  494
  759
  1,135
  1,647
  2,324
  3,194
  4,288
  5,630
  7,245
  9,151
  11,363
  13,892
  16,745
  19,923
  23,426
  27,250
  31,390
  35,839
  40,589
  45,634
  50,967
  56,583
  62,477
  68,646
  75,090
  81,809
  88,807
  96,088
  103,658
  111,526
  119,703
Total equity, $m
  1,054
  1,520
  2,274
  3,299
  4,654
  6,398
  8,589
  11,277
  14,511
  18,329
  22,760
  27,826
  33,540
  39,906
  46,922
  54,582
  62,874
  71,785
  81,300
  91,405
  102,088
  113,336
  125,141
  137,498
  150,405
  163,864
  177,881
  192,464
  207,627
  223,387
  239,765
Total liabilities and equity, $m
  1,548
  2,279
  3,409
  4,946
  6,978
  9,592
  12,877
  16,907
  21,756
  27,480
  34,123
  41,718
  50,285
  59,829
  70,348
  81,832
  94,264
  107,624
  121,889
  137,039
  153,055
  169,919
  187,618
  206,144
  225,495
  245,673
  266,688
  288,552
  311,285
  334,913
  359,468
Debt-to-equity ratio
  0.247
  0.350
  0.400
  0.430
  0.450
  0.460
  0.470
  0.480
  0.480
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667
  0.667

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -20
  -48
  -73
  -107
  -153
  -213
  -290
  -385
  -501
  -640
  -802
  -977
  -1,190
  -1,428
  -1,693
  -1,983
  -2,299
  -2,641
  -3,006
  -3,396
  -3,809
  -4,245
  -4,703
  -5,184
  -5,686
  -6,211
  -6,757
  -7,327
  -7,919
  -8,534
  -9,174
Depreciation, amort., depletion, $m
  65
  102
  147
  209
  289
  393
  524
  685
  877
  1,105
  1,370
  1,660
  2,001
  2,381
  2,800
  3,257
  3,751
  4,283
  4,851
  5,454
  6,091
  6,762
  7,466
  8,204
  8,974
  9,777
  10,613
  11,483
  12,388
  13,328
  14,305
Funds from operations, $m
  29
  54
  75
  101
  136
  180
  234
  299
  376
  466
  568
  683
  811
  953
  1,107
  1,273
  1,452
  1,642
  1,844
  2,058
  2,282
  2,517
  2,763
  3,020
  3,287
  3,566
  3,855
  4,156
  4,469
  4,794
  5,131
Change in working capital, $m
  -2
  16
  22
  30
  40
  52
  65
  79
  95
  113
  131
  150
  169
  188
  207
  226
  245
  263
  281
  298
  315
  332
  349
  365
  381
  397
  414
  431
  448
  465
  484
Cash from operations, $m
  31
  39
  52
  71
  96
  129
  169
  220
  281
  353
  437
  533
  643
  765
  899
  1,047
  1,207
  1,379
  1,563
  1,759
  1,967
  2,185
  2,415
  2,655
  2,906
  3,168
  3,442
  3,726
  4,021
  4,328
  4,648
Maintenance CAPEX, $m
  0
  -59
  -91
  -136
  -197
  -278
  -382
  -512
  -673
  -866
  -1,094
  -1,358
  -1,660
  -2,001
  -2,381
  -2,800
  -3,257
  -3,751
  -4,283
  -4,851
  -5,454
  -6,091
  -6,762
  -7,466
  -8,204
  -8,974
  -9,777
  -10,613
  -11,483
  -12,388
  -13,328
New CAPEX, $m
  -276
  -582
  -818
  -1,113
  -1,472
  -1,894
  -2,378
  -2,920
  -3,511
  -4,145
  -4,812
  -5,501
  -6,204
  -6,913
  -7,619
  -8,317
  -9,004
  -9,676
  -10,332
  -10,973
  -11,600
  -12,214
  -12,819
  -13,418
  -14,015
  -14,615
  -15,220
  -15,835
  -16,465
  -17,113
  -17,784
Cash from investing activities, $m
  -213
  -641
  -909
  -1,249
  -1,669
  -2,172
  -2,760
  -3,432
  -4,184
  -5,011
  -5,906
  -6,859
  -7,864
  -8,914
  -10,000
  -11,117
  -12,261
  -13,427
  -14,615
  -15,824
  -17,054
  -18,305
  -19,581
  -20,884
  -22,219
  -23,589
  -24,997
  -26,448
  -27,948
  -29,501
  -31,112
Free cash flow, $m
  -182
  -602
  -856
  -1,178
  -1,572
  -2,043
  -2,591
  -3,212
  -3,904
  -4,658
  -5,468
  -6,326
  -7,222
  -8,149
  -9,100
  -10,070
  -11,053
  -12,048
  -13,052
  -14,064
  -15,086
  -16,120
  -17,166
  -18,229
  -19,313
  -20,420
  -21,555
  -22,722
  -23,927
  -25,173
  -26,464
Issuance/(repayment) of debt, $m
  -50
  266
  376
  512
  677
  871
  1,093
  1,342
  1,614
  1,906
  2,212
  2,529
  2,853
  3,178
  3,503
  3,824
  4,140
  4,449
  4,750
  5,045
  5,333
  5,616
  5,894
  6,169
  6,444
  6,719
  6,998
  7,281
  7,570
  7,868
  8,177
Issuance/(repurchase) of shares, $m
  0
  582
  826
  1,132
  1,509
  1,958
  2,480
  3,074
  3,735
  4,457
  5,233
  6,043
  6,904
  7,794
  8,709
  9,643
  10,591
  11,551
  12,521
  13,501
  14,491
  15,493
  16,508
  17,541
  18,593
  19,670
  20,774
  21,910
  23,082
  24,294
  25,552
Cash from financing (excl. dividends), $m  
  -31
  848
  1,202
  1,644
  2,186
  2,829
  3,573
  4,416
  5,349
  6,363
  7,445
  8,572
  9,757
  10,972
  12,212
  13,467
  14,731
  16,000
  17,271
  18,546
  19,824
  21,109
  22,402
  23,710
  25,037
  26,389
  27,772
  29,191
  30,652
  32,162
  33,729
Total cash flow (excl. dividends), $m
  -214
  246
  346
  466
  613
  785
  983
  1,204
  1,446
  1,705
  1,977
  2,247
  2,534
  2,823
  3,112
  3,397
  3,678
  3,952
  4,220
  4,482
  4,738
  4,989
  5,236
  5,481
  5,725
  5,969
  6,217
  6,468
  6,725
  6,990
  7,264
Retained Cash Flow (-), $m
  112
  -582
  -826
  -1,132
  -1,509
  -1,958
  -2,480
  -3,074
  -3,735
  -4,457
  -5,233
  -6,043
  -6,904
  -7,794
  -8,709
  -9,643
  -10,591
  -11,551
  -12,521
  -13,501
  -14,491
  -15,493
  -16,508
  -17,541
  -18,593
  -19,670
  -20,774
  -21,910
  -23,082
  -24,294
  -25,552
Prev. year cash balance distribution, $m
 
  68
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -268
  -480
  -666
  -896
  -1,172
  -1,497
  -1,870
  -2,289
  -2,752
  -3,256
  -3,796
  -4,369
  -4,971
  -5,597
  -6,246
  -6,914
  -7,599
  -8,301
  -9,019
  -9,753
  -10,504
  -11,272
  -12,060
  -12,869
  -13,700
  -14,557
  -15,442
  -16,357
  -17,304
  -18,288
Discount rate, %
 
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
 
  -254
  -428
  -555
  -694
  -839
  -982
  -1,117
  -1,235
  -1,329
  -1,395
  -1,430
  -1,431
  -1,400
  -1,341
  -1,256
  -1,152
  -1,035
  -910
  -784
  -661
  -546
  -440
  -347
  -268
  -202
  -148
  -106
  -74
  -50
  -33
Current shareholders' claim on cash, %
  100
  69.3
  49.3
  35.9
  26.7
  20.3
  15.8
  12.4
  10.0
  8.1
  6.7
  5.6
  4.7
  4.0
  3.4
  3.0
  2.6
  2.3
  2.0
  1.8
  1.6
  1.4
  1.3
  1.2
  1.1
  1.0
  0.9
  0.8
  0.7
  0.7
  0.6

Fortress Transportation and Infrastructure Investors LLC owns and acquires infrastructure and equipment that is essential for the transportation of goods and people across the world. The Company operates through five segments Aviation Leasing, Offshore Energy, Shipping Containers, Jefferson Terminal and Railroad. The Aviation Leasing segment consists of aircraft and aircraft engines held for lease for long-term. The Offshore Energy segment consists of vessels and equipment that support offshore oil and gas activities and held for long-term operating leases. The Shipping Containers segment consists of an investment in an unconsolidated entity engaged in the acquisition and leasing of shipping containers on both an operating lease and finance lease basis. The Jefferson Terminal segment consists of a multi-modal crude and refined products terminal and other related assets. The Railroad segment consists of the Company's Central Maine and Quebec Railway (CMQR).

FINANCIAL RATIOS  of  Fortress Transportation&Infrastructure I (FTAI)

Valuation Ratios
P/E Ratio -70.2
Price to Sales 9.4
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 45.3
Price to Free Cash Flow -5.7
Growth Rates
Sales Growth Rate 8.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.5%
Cap. Spend. - 3 Yr. Gr. Rate 25.7%
Financial Strength
Quick Ratio NaN
Current Ratio 1.1
LT Debt to Equity 24.7%
Total Debt to Equity 24.7%
Interest Coverage -2
Management Effectiveness
Return On Assets -0.4%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -1.5%
Ret/ On T. Cap. - 3 Yr. Avg. -0.4%
Return On Equity -1.8%
Return On Equity - 3 Yr. Avg. -0.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 88.6%
Gross Margin - 3 Yr. Avg. 89.1%
EBITDA Margin 25.5%
EBITDA Margin - 3 Yr. Avg. 34.5%
Operating Margin -27.5%
Oper. Margin - 3 Yr. Avg. -21%
Pre-Tax Margin -26.8%
Pre-Tax Margin - 3 Yr. Avg. -13.5%
Net Profit Margin -13.4%
Net Profit Margin - 3 Yr. Avg. -2.8%
Effective Tax Rate -2.5%
Eff/ Tax Rate - 3 Yr. Avg. 6.3%
Payout Ratio -500%

FTAI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTAI stock intrinsic value calculation we used $149 million for the last fiscal year's total revenue generated by Fortress Transportation&Infrastructure I. The default revenue input number comes from 2016 income statement of Fortress Transportation&Infrastructure I. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FTAI stock valuation model: a) initial revenue growth rate of 54.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.7%, whose default value for FTAI is calculated based on our internal credit rating of Fortress Transportation&Infrastructure I, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Fortress Transportation&Infrastructure I.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FTAI stock the variable cost ratio is equal to 118.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FTAI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.9% for Fortress Transportation&Infrastructure I.

Corporate tax rate of 27% is the nominal tax rate for Fortress Transportation&Infrastructure I. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FTAI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FTAI are equal to 717.1%.

Life of production assets of 18.2 years is the average useful life of capital assets used in Fortress Transportation&Infrastructure I operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FTAI is equal to 19.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1054 million for Fortress Transportation&Infrastructure I - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 75.922 million for Fortress Transportation&Infrastructure I is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Fortress Transportation&Infrastructure I at the current share price and the inputted number of shares is $1.4 billion.

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COMPANY NEWS

▶ Fortress Transportation posts 3Q profit   [05:38AM  Associated Press]
▶ Fortress Transportation posts 2Q loss   [Aug-05-17 01:10AM  Associated Press]
▶ Fortress Transportation posts 1Q loss   [May-05-17 05:02AM  Associated Press]
▶ Fortress Transportation posts 4Q loss   [Feb-23-17 06:57PM  Associated Press]
Financial statements of FTAI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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